NEWS publishers could be deterred from uncovering wrongdoing for fear of paying the other party’s libel costs even if they win the case, it is feared.

Daily Echo publisher Newsquest is among those fighting proposals to impose punitive costs on publications which are not signed up to a government-approved regulator.

The public has until January 10 to take part in a government consultation on implementing Section 40 of the Crime and Courts Act 2013.

The measure could lead to serious consequences for publications which do not sign up to a government-approved regulator. So far, the only such regulator is Impress, partly funded by a family charity of former motor racing boss Max Mosley.

Almost all newspapers currently belong instead to the Independent Press Standards Organisation (Ipso), which is funded by the news industry.

Under Section 40, newspapers who are not signed up to the state-approved regulator could have to pay the legal bills of libel complainants, even if the case is defeated in court.

Among the critics of the plans is Tom Bower, whose books have exposed corruption by Robert Maxwell among others.

He said: “Reliance on the truth as a defence against greed and chicanery is now endangered by the government’s refusal to rule out implementing section 40.”

Earlier this week, a poll by YouGov revealed that 49 per cent of people backed the principle of an industry-related regulator such as Ipso. Only four per cent polled on behalf of the News Media Association (NMA) favoured the Impress model.

Lynne Anderson, the NMA deputy chief executive, said: “This survey demonstrates conclusively that a regulatory regime led by Impress - which is completely reliant upon funding from one wealthy individual, Max Mosley - cannot command the confidence of the public.

“Ipso is funded in its entirety by its member national, regional and local newspaper publishers which is the funding model the public want and expect from an industry which is committed to robust self regulation.”

Former culture secretary John Whittingdale has said Sir Brian Leveson does not want to chair the second part of his public inquiry into the press.

The question of whether to resume the inquiry forms part of the consultation.

Mr Whittingdale said: “Apart from anything else, the one thing that’s clear is that Lord Justice Leveson has no wish to undertake another inquiry.”

To take part in the consultation, visit gov.uk/government/consultations/consultation-on-the-leveson-inquiry-and-its-implementation